The ideal Credit Report Should Include

Credit Reporting Agency reports must be reliable and up to date. A report should state both the date of the report and the date the information was gathered. If the source of the report is not the creator of the report the origin of the report should be stated. The following should be included in such reports:

1.Name, Address and History of the Subject. Where the business name and address have been registered should be verified, together with registration numbers and dates. previous names and addresses should also be indicated, particularly in the case of unregistered trade names ("DBA or doing business as") used by sole proprietors. The history of a business, the education, experience and reputation of the principals and the quality of management are important. Any recent changes should be indicated, together with an appraisal of likely trends in the future.

2.Subject's Bankers. If this information is available, it is useful to know the name, address, contact, telephone and fax numbers of the branch or branches where the buyer has accounts. The length of the relationship, type of accounts, size of secured and unsecured lines of credit, and opinion of the bank should be given.

3.Ownership, Legal Status and Date of Establishment In the case of partnerships, private and public companies, the names of the major partners or owners (shareholders), and directors should be listed. Connections of the partners or owners with other businesses should be indicated with its nature. The original date of establishment and dates of any changes in legal status should be listed.

4.Description of Activity Some subjects may be engaged in a number of different activities (manufacturing, distributing, wholesaling, etc.). When applicable, the whole range should be described. Names of foreign and domestic suppliers for whom the subject acts as agent, representative or distributor should be listed. Trade references should be listed with their experience. Principal lines of goods and services should be listed. Past, present and future business trends should be assessed.

5.Subject's Standing in the Industry The importance of the standing of the subject in its industry should be indicated together with the range (type) of clients (buyers) it serves. The number of employees should be included.

6.Commercial Morality and Payment Record An opinion on both of these items should be given and supported by evidence based on knowledge and collection experience.

7.Inventory A description and valuation of inventory, along with method of valuation should be included.

8.Financial Condition A subject's financial condition is clearly an essential element for appraising creditworthiness and every effort should be made to provide past and current records (with dates) of assets, liabilities, equity, turnover, income, expenses and profitability of the subject.

A. It is appreciated that in the case of sole proprietorships and certain types of companies, figures are not required to be officially published. In such cases, and when detailed figures are not released, estimates should be provided and clearly described as such. If financial statements cannot be supplied, the reasons should be given.

B. In the case of companies legally required to publish annual accounts, or of firms who voluntarily supply agencies with financial information, it is helpful to have balance sheets and income statements made available for consecutive years with dates. It should be indicated if the statements are audited or not and who the auditors are. Every effort should be made to include the most current interim statements to reveal the current situation. The following items are of particular importance:

- Capital (both registered and paid-up figures are essential),

- Reserves,

- Current and Long Term Liabilities (secured or unsecured),

- Current and Long Term Assets (pledged and unpledged),

- Net Worth and Liquidity Position,

- Property Owned and other Fixed Assets (with details of debentures, charges or mortgages if applicable).

- Profitability.

9.Public Sector Entities In the case of subjects in the public sector, where commercial risk is inapplicable, political risk insurance generally covers the risk of failure or refusal to pay. If credit reporting agencies are able to provide information on public sector entities, the reports should, in addition to the information required on private sector subjects as appropriate, include answers to the following questions:

A. Is the subject an agency of the Central Government?

B. If not, is the subject a publicly-owned entity? The precise status should be described with appropriate references to enabling laws or decrees which may apply. Indicate the degree of autonomy.

C. What budgetary or other provision enables the subject to engage in commercial contracts?

D. Is the subject itself, or some other entity, responsible for payment?

E. What is the source of the subject's funds?

F. Has the subject a satisfactory record in performance of contracts.

G. Can the subject be made judicially or administratively insolvent?

H. In the event of a default, are normal legal processes feasible against the subject?

10.Opinions and Recommendations. If no opinion is expressed on creditworthiness, the report should contain sufficient facts and figures to enable the insurer to make its own assessment. If an opinion is offered, it should be supported by reasoned argument and the basis of the opinion explained (e.g., bank advice, trading or debt collection experience). If secured terms are recommended, the worth and financial standing of the proposed guarantors should be indicated. If a credit reporting agency usually provides an opinion but, in a particular case, refrains from comment, the significance of this omission should be indicated.

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